The United States Department of Treasury on Monday untagged China as a "currency manipulator," in its latest report on macroeconomic and foreign exchange policies of major trading partners of the U.S.
"China has made enforceable commitments to refrain from competitive devaluation, while promoting transparency and accountability." Treasury Secretary Steven T. Mnuchin said in a statement.
The country was designated a currency manipulator by the treasury department in August last year, as tensions between the two countries over trade reached new heights.
The treasury had alleged that China devalues its currency, in order to increase the appeal of its exports, and gain an unfair advantage in international trade.
In disagreement, the International Monetary Fund (IMF) last year said that China's currency is fairly valued.
The U.S. and China are set to sign the phase one of their trade deal on Wednesday.
While the exact details on what the agreement will entail haven't been made public, the treasury department said that China has made "enforceable commitments" to stop devaluing its currency.
China has also agreed to publish relevant information related to exchange rates and external balances, the forex report said.
China will also continue to be on the "monitoring list" of the treasury, a list of major U.S. trading partners "that merit close attention to their currency practices and macroeconomic policies."
Switzerland has also been added to the monitoring list this year, in addition to Japan, South Korea, Germany, Italy, Ireland, Singapore, Malaysia, and Vietnam that were added in the previous reports.